Introduction

Though the Pakistan’s contribution to greenhouse gases (GHG) emissions is miniscule as compared to other countries i.e., only 0.8 per cent of the total GHG emissions, yet it is one of the major victims of climate change effects. The present study is an attempt to explore the impacts of climate change on economic growth of Pakistan by conducting national as well as provincial level analysis for the period 1973-2010. The study uses temperature as proxy for climate change. It has been found that temperature has a negative and significant relationship with GDP and productivity in agriculture, manufacturing and services sectors. However, severity of these negative impacts is higher in agriculture in comparison with manufacturing and services. The provincial results suggest that there is a negative and significant relationship of climate change with growth in the provinces of Balochistan and Khyber Pakhtunkhwa (KPK) while insignificant relationship with growth in Punjab and Sindh provinces. The results reveal that a comprehensive policy regarding adoption of mitigation strategies to combat climate change is very crucial for Pakistan.

The Applied Economics Research Centre (AERC), University of Karachi, was established in 1973. The major functions of the Centre are policy oriented Core/academic Research , Contract Research for Clients, and post-graduate teaching and providing advisory services to the government.